Paycom Software Inc
NYSE:PAYC
Paycom Software Inc
Paycom Software Inc. has carved its niche as a formidable player in the realm of human capital management (HCM) solutions. Founded in 1998 in Oklahoma City, Paycom started as a fledgling payroll service provider, evolving into a trailblazer in the technology-driven transformation of HR management. The company's core proposition revolves around its comprehensive, cloud-based software platform that streamlines a variety of business operations, including payroll, talent acquisition, time and labor management, and HR management. In a digital age where organizations seek efficiency and data-driven operational precision, Paycom delivers value by automating routine tasks, enhancing compliance with labor regulations, and offering holistic insights into workforce analytics. This enables HR departments to focus more on strategic decision-making rather than administrative hassles.
Paycom's revenue model is primarily subscription-based, relying on a steady stream of recurring fees from its clients. The company charges businesses for accessing its suite of services, which is tailored based on the size and needs of the organization. By continuously enhancing its platform with new features and functionalities, Paycom ensures it remains indispensable to its customers. Beyond the subscription model, Paycom benefits from technological integrations and personalized service offerings that set it apart from competitors. The firm's ability to create long-standing client relationships is reinforced by its persistent investment in customer service and technological innovation, which fuels growth and cements its position in the ever-evolving HCM landscape. This strategic coherence has powered Paycom's journey from a local payroll service provider to a dominant force in HCM software across the United States.
Paycom Software Inc. has carved its niche as a formidable player in the realm of human capital management (HCM) solutions. Founded in 1998 in Oklahoma City, Paycom started as a fledgling payroll service provider, evolving into a trailblazer in the technology-driven transformation of HR management. The company's core proposition revolves around its comprehensive, cloud-based software platform that streamlines a variety of business operations, including payroll, talent acquisition, time and labor management, and HR management. In a digital age where organizations seek efficiency and data-driven operational precision, Paycom delivers value by automating routine tasks, enhancing compliance with labor regulations, and offering holistic insights into workforce analytics. This enables HR departments to focus more on strategic decision-making rather than administrative hassles.
Paycom's revenue model is primarily subscription-based, relying on a steady stream of recurring fees from its clients. The company charges businesses for accessing its suite of services, which is tailored based on the size and needs of the organization. By continuously enhancing its platform with new features and functionalities, Paycom ensures it remains indispensable to its customers. Beyond the subscription model, Paycom benefits from technological integrations and personalized service offerings that set it apart from competitors. The firm's ability to create long-standing client relationships is reinforced by its persistent investment in customer service and technological innovation, which fuels growth and cements its position in the ever-evolving HCM landscape. This strategic coherence has powered Paycom's journey from a local payroll service provider to a dominant force in HCM software across the United States.
Revenue Growth: Paycom reported Q4 2025 revenue of $544 million, up 10% year-over-year, and full-year 2025 revenue of $2.05 billion, surpassing its initial outlook.
Recurring Revenue: Recurring and other revenue grew 11% year-over-year in Q4 and 10% for the full year to $1.94 billion, exceeding initial expectations.
Profitability: Adjusted EBITDA margin was strong at 43.4% in Q4, with full-year adjusted EBITDA up 14% to $882 million and a 180 bps margin expansion.
Retention Improvement: Annual revenue retention rose to 91% in 2025, up from 90% in 2024, aided by automation and new AI products.
Guidance Modesty: 2026 revenue guidance is $2.175–2.195 billion (6–7% growth), lower than last year’s outlook, with recurring revenue expected to grow 7–8%.
AI & Automation: Management highlighted significant gains in automation and AI, citing strong client ROI and productivity improvements, including the IWant product.
Sales Organization: Sales team expanded from 8 to 10 groups, adding 100 salespeople, with increased focus on training and new logo acquisition.
Shareholder Returns: Company repurchased 1.7 million shares for $370 million and will pay a $0.375 per share dividend in March.
